SINGAPORE EXCHANGE LIMITED (SGX:S68)
Singapore Exchange - A SPAC-tacular Initiative
- SGX (SGX:S68) pulls ahead of regional rivals in allowing SPAC listings from 3 Sep. Its SPAC framework has been revised to be more market-friendly, aligned closer to US SPAC listing rules, allowing a level playing field to entice listings.
- Reiterate HOLD rating on SGX. Incremental listing fees from SPACs are not likely to be material in the near term but add to SGX’s long-term competitiveness.
SGX’s SPAC framework edges it ahead of its regional peers
- SGX announced new rules that enable the listing of Special Purpose Acquisition Companies (SPACs) on its Mainboard effective 3 Sep 2021. This follows an industry consultation on its framework issued in Mar 2021 where SGX received feedback from over 80 respondents ranging from financial institutions (FIs) and private equity firms to venture capital funds.
- SGX’s SPAC framework places it ahead of its regional rival, HKEX, which is also reported to be in the midst of deliberating the listing of these vehicles in a bid to boost its IPO pipeline (and trading volumes) and share of the associated fees; NASDAQ and NYSE have been getting the lion’s share of both.
📢 #SingaporeExchange #SGX today announced new rules that enable Special Purpose Acquisition Companies (SPACs) to list...
Posted by SGinvestors.io on Thursday, September 2, 2021
- We understand that regulators in Hong Kong remain cautious of introducing arbitrage from weak investor knowledge.
The allure of SPACs
- SPACs are shell companies or blank (via private negotiations with the SPAC’s sponsor vs determined by book-building done by investment bankers).
Key listing criteria consistent with US SPAC listing rules
- Among the outlined key criteria to list SPACs on SGX include minimum will now be allowed to redeem their shares (vs. only shareholders opposed to the business combination).
Prospective SPAC sponsors include Novo Tellus and Vertex
- While incremental listing fees from SPACs will not likely be material, we believe that this initiative will add to SGX’s product completeness and long-term competitiveness over regional peers. The key question is then whether there is a sufficient pipeline of both sponsors and target companies available in Southeast Asia.
- See
- Sponsors said to be considering SPAC listings in Singapore include Novo Tellus and Temasek-backed Vertex Holdings.
Andrea CHOONG
CGS-CIMB Research
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https://www.cgs-cimb.com
2021-09-03
SGX Stock
Analyst Report
10.700
SAME
10.700
